As the potential for a Brexit grows ever closer, many businesses are still uncertain about whether they wish to leave the European Union. In the next few months, people in the UK will be hearing more about whether this will be a good idea, and the effect it is likely to have upon individuals. However, as a business, logistics and supply chain companies are more likely to want to know about what a Brexit could mean for them, both for European and international deliveries.

The UK and the EU for couriers

There are very strong links between the countries of the United Kingdom and the European Union. For example, around 50% of all experts from the United Kingdom go to the European Union. In Scotland, for example, more than 75% of food and drink exports are carried into the EU. 57% of cars built in the UK are exported to Europe, and the total industry is worth about £15 billion.

Reduction in free movement

One of the most significant issues relating to our exit from the European Union is that of free movement. Currently, UK citizens are able to travel throughout the EU without restriction. This is good for travel, but it is also important to courier and dispatch businesses. Free movement allows companies to carry goods throughout the EU, and is vital to an effective and reliable dispatch service across Europe. At the moment, as part of the European Union, UK companies can ship packages and goods entirely without restriction. With a Brexit, each delivery coming from the UK would need to be held at customs while the paperwork is checked. Essentially, shipments which now move freely between countries in the European Union would be delayed and intensively inspected. This could have a serious impact on supply chain and logistics companies.

VAT and import duties

Currently, companies pay no import duties on items delivered to and from the EU. However, if the UK were to exit the European Union, any item worth more than £15 would have to be assessed for import duties and VAT. This would be around 20% of the total value of the item, which could make exporting extremely costly. Many countries will also charge a handling fee above duties and VAT, which could increase the total tax cost of your import to around 25%, or a quarter of the value of the item you are carrying. This could make it extremely expensive to import or export anything to from the EU.

Companies unprepared for exit

Another issue relating to whether Britain leaves the European Union is the lack of preparedness from major companies. Leading logistics businesses and experts are opposed to the Brexit, and this opposition may be preventing them from effectively organising themselves in case Britain does vote to leave the EU. If companies are not fully prepared to handle the new logistics demands of a Brexit, then they are likely to struggle to fill orders, and may start losing money.